February 12, 2014
Washington, DC – The National Consumers League, the nation’s pioneering consumer advocacy organization has submitted a letter to the Committee on Consumer Protection and Commerce of the Hawaii House of Representatives regarding HB 2012, a bill that addresses the difficulty consumers have in accessing tickets to concerts and sporting events at a fair price.
"Consumers are right to be outraged when they try to buy tickets and find that they have sold out in seconds, only to quickly reappear on the secondary market at inflated prices. NCL applauds the committee for examining this complex issue," said NCL Vice President of Public Policy on Telecommunications and Fraud John Breyault. "However long experience has taught that there are no silver bullets that will fix the problem of fair access to tickets in the long term. For instance, price caps on resold tickets may have the unintended consequence of driving consumers searching for tickets to back alley scalpers and online classified websites like Craigslist, which provide no protections whatsoever. Instead, a pro-consumer solution to this issue requires a multi-pronged approach. NCL supports a number of reforms that would help level the playing field when it comes to ticket-buying."
First, according to the consumer group, the use of “bot” software by unscrupulous ticket brokers denies consumer fair access to tickets is a serious problem. By jumping to the front of the digital line, this software enables brokers to scoop up the most desirable tickets quickly, often before the average consumer has a chance to buy. HB 2012 rightfully outlaws the use of “bot” software, which is already illegal in more than a dozen states. NCL is also calling for greater cooperation between primary ticketers like Ticketmaster, ticket brokers, ticket exchanges like StubHub and state attorneys general to put an end to the use of ticket “bots.”
In its letter, NCL also argued that a well-functioning ticket market can only exist if consumers have the information they need to make an informed decision. Unfortunately, the game is often rigged by promoters, artists, broker and primary ticketers through the rampant and little-discussed use of “holdbacks.” In far too many shows, only a small fraction of tickets are ever put on sale to the general public. This leads consumers to believe that a quick sellout is due to high demand, skewing the fair market price on the resale market. This is why NCL supports transparency laws that would require sellers to disclose how many tickets will be made available for a given event. Armed with this information, consumers can make an informed decision whether to buy tickets the usual way, or obtain tickets through pre-sales, credit card rewards programs, or other means.
NCL supports consumer protections such as requiring brokers to register with the state, provide toll-free customer service lines and offer refunds if tickets purchased on the resale market are fraudulent. These are common-sense protections that would address many of the problems consumers encounter when they are forced to buy from street-level scalpers or deceptive online resale Web sites.
Finally, NCL opposes the use of restrictive technologies like “paperless” tickets. This solution to the scalping problem is worse than the disease, since it prevents consumers from buying, selling, donating or giving away tickets as they wish. In addition, the use of this technology may lock consumers into one seller’s resale service, which is likely to involve higher fees and more restrictions than consumers typically face today.
"We applaud the Hawaii State Legislature for tackling the issue of creating a fair, transparent and competitive ticket-buying marketplace," said Breyault. "Consumers in the Aloha State are well-served by this debate."
About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.